INSIDE DIGITAL TRANSFORMATION
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or many organizations, ‘digital transformation’ is both a buzzword and a mystery. It implies a high-tech form of self-improvement, but, like many such terms, represents a concept more than a process and leaves many people wondering what the words mean, what such a transformation could accomplish and what a ‘digitally transformed’ company might look like. The meaning of ‘digital transformation’ is about as open for discussion as are the notions of ‘success’ and ‘happiness’; one must look to the street to see how it is shaping up as a practical matter. One good example of how the concept is being realized can be found at Wärtsilä, an engine manufacturer and technology leader in the global marine and energy sectors, which describes its digital transformation initiatives as – a change in corporate culture affecting how the organization brings new products, services and solutions to market. “For us, digital transformation means a transition from being a traditional industrial company to an as-a-service, smart technology industrial company,” says Marco Ryan, Wärtsilä’s Chief Digital Officer. “This involves transforming from a product-led model – selling a product and servicing it – to a much more data/insight-led model in which we partner and collaborate differently across what’s known as ecosystem thinking.”
Marco Ryan, Chief Digital Officer, Wärtsilä
10 | SURVEYOR | 2018 VOLUME 1
‘Ecosystem thinking’, another fairly new term, essentially refers to a broad point of view that sees questions not as isolated problems with singular answers, but as elements of a network of causes and effects and interrelationships (the ‘ecosystem’) that allows for many possible solutions – based on the interplay between those elements. In a way, it’s the Digital Age version of what a previous generation called ‘getting the big picture.’ So, for a ‘digital business’, ecosystem thinking on a customer service issue might look at the activities of related manufacturers, vendors, transporters and regulators to find a solution that brings benefit to all parties; or, for an equipment service matter, might look at the operation of the entire plant in which the equipment is installed, to find secondary or tertiary causes affecting the unit’s function. An example from the maritime world would be the way the engine manufacturers service programs have changed in recent years. Historically, it was sufficient to focus on optimizing an engine to get from Point A to Point B at greatest efficiency; today that is no longer the case, and many manufacturers now offer expanded digital asset management services. “There’s little sense in going from A to B efficiently if the ship wastes time and effort going from B to C, or if it ends up sitting outside Point D burning off all the savings it just achieved because it got there too soon for the port’s scheduling,” Ryan says. “It is much better to optimize the whole path from A to D, which means looking beyond fuel consumption to vessel speed and routing, trim, readiness of the destination port and other aspects of the voyage, to yield better value for money overall. That’s ecosystem thinking, and companies like Wärtsilä are trying to think up and down the value chain to find where we can do things differently to add value for our customers. Our transformation as a business is very much about transformation into a service company, which means how we build, maintain and update products, how we develop solutions, how we collaborate between product divisions, and so on. It’s all part of as-a-service thinking, which is about trying to find solutions and products that deliver value to customers. As our customers’ markets and needs change, we need to make sure our solutions, products and services remain relevant and drive value for them. This represents quite a lot of change in some of our ways of working together and in some of our underlying competencies and business models.”
